Visit Alexandria warns tourism metrics softening; consumption taxes and hotel revenue slip

Visit Alexandria told the City Council that tourism and lodging indicators are showing headwinds that mirror national and regional economic trends and that the city should be prepared for “softness” in some visitor-driven revenues.

Kate Ellis, general manager of Hotel Indigo and chair of Visit Alexandria, and the Visit Alexandria research and marketing team summarized national, regional and local trends. At the national level they flagged a higher unemployment rate (about 4.3 percent) and weaker hiring, and they reported a 4.5 percent drop in local consumption‑tax receipts in July and August compared with the prior year. The presenters said revenue per available room (RevPAR) has been flat year‑to‑date but that the DC‑region and Northern Virginia have shown declines: Q2 2025 RevPAR was down 5.8 percent for the DC region and down 7.7 percent for Northern Virginia.

Visit Alexandria staff described neighborhood variation inside the city: Old Town showed modest declines, the Carlisle submarket was weaker, and the West End was down by a larger share (the West End has a higher proportion of government‑dependent and budget properties). Staff also noted that short‑term rentals have continued to gain market share locally, with short‑term rental revenue per available room up roughly 13 percent over the prior 12 months.

On taxes and pricing, Visit Alexandria provided comparative figures: Alexandria’s lodging tax was described as 9.5 percent plus $1.25 per night; District of Columbia was cited at about 15.5 percent (without the per‑night fee); Arlington’s gross lodging tax structure was also discussed. For restaurant taxes, Visit Alexandria said Alexandria’s combined local/state restaurant tax totals roughly 11 percent, compared with about 10 percent in DC and Fairfax. The presenters and several councilmembers discussed how these combined rates affect perceived value for travelers and meeting planners.

Visit Alexandria outlined its near-term response: conversion‑oriented advertising targeted to audiences most likely to book in the short term; expanded email and retargeting campaigns; investment in generative engine optimization (to surface Alexandria in AI trip‑planning tools); an international focus on the U.K.; neighborhood promotion hub and richer storytelling content; a holiday campaign with a pillar focused on shopping to support small businesses; and reorganized sales deployment to pursue meetings and group business.

Councilmembers asked for additional data and clarifications. Councilman Chapman asked about whether tax rate differences materially shift leisure visitors; Visit Alexandria said individual leisure travelers are hard to attribute to a single tax decision, but meeting planners with large room blocks do consider total costs and taxes when choosing between jurisdictions. Vice Mayor Bagley asked about accessible travel: Visit Alexandria said it has a landing page and will convene member education sessions on accessibility and is partnering with Virginia Tech on accessibility initiatives. Councilmembers also raised meeting‑space capacity concerns: Visit Alexandria noted that lack of large meeting venues constrains some bookings and that additional public or private meeting space could capture future group business.

Visit Alexandria framed the local picture as mixed: annual visitor spending exceeded $1 billion for the first time in the city’s reporting, but recent months show softness that could affect near‑term sales, tax receipts and small businesses. Staff emphasized targeted marketing, event leveraging (including holidays and America250) and improving conversion to support local merchants and lodging.